7 Steps to Wealth

The Vital Difference Between Property and Real Estate

John L. Fitzgerald

• Publisher: Wiley
• Year: 2018
• Print ISBN: 9780730358602
• eBook ISBN: 9780730358619
• Edition: 1
• Topic: Business
• Subtopic: Real Estate
• Index: Business

Get the most out of property investment and secure your financial future

7 Steps to Wealth is the only real estate book in Australia endorsed by three of Australia's property billionaires. It shares John L. Fitzgerald's own 35-year proven property strategy, supported statistically and with real life case studies from readers of earlier editions. Now in its 8th edition the book is completely up-to-date with the latest census data, location criteria and growth forecasts.

Most importantly the book exposes the difference between property and real estate, proving that it's only the land that appreciates and that the buildings that sit on the land actually depreciate. Indeed 7 Steps to Wealth uses Warren Buffet's secret of compound growth but adapted for Australian property investors. Fitzgerald proves that certain residential land is Australia's best growth asset –– and will continue to be given current record population growth.

• Unlock the secret power of compound growth and make it work for you

• Avoid the common mistakes that most property investors make

• Read case studies and testimonials from millionaires using the 7 step strategies

• Understand how to safely build wealth in property, be cashflow positive and still get a tax deduction.

With Australia's record population growth, there is no better time for Australians to use this proven strategy to safely build wealth for a comfortable retirement, one that doesn't mean relying on government welfare.

PART I
Starting points

Quiz

Here are a few questions to help you focus on wealth-building, and to remind you where you are starting from. Don’t worry if you don’t know the answers yet: you will, by the time you attempt this quiz again at the end of the book!

1. In making a wealth-building investment decision, what would be more important?
   • 
     how you feel about it
   • 
     how it stacks up logically
2. What has shown the higher investment return over the past 10 years?
   • 
     shares
   • 
     residential property
3. In buying a residential investment property for wealth-building, what would be most important?
   • 
     rental returns
   • 
     taxation benefits
   • 
     capital growth
4. If you invested in residential property, would you use the same criteria and decision-making process as you used to acquire your own home?
   • 
     yes
   • 
     no
5. Is it prudent for you to acquire property close to where you live?
   • 
     yes
   • 
     no
6. What would be more important when acquiring an investment property for wealth building?
   • 
     managing your cash flow
   • 
     buying the right property
7. What type of property would show the highest capital growth?
   • 
     unit/townhouse
   • 
     house
   • 
     land
8. If you had a $300 000 deposit to invest in property, would you be better off buying:
   • 
     one property for $1 000 000?
   • 
     one property for $2 000 000?
   • 
     two properties for $500 000 each?
9. The median house price in Brisbane rose from $30 500 in 1977 to $550 000 in 2018.
   • 
     true
   • 
     false
10. If you bought a house in 1967 in Melbourne, Sydney or Brisbane, by how much would its value have increased in 2017?
    • 
      doubled in value
    • 
      five times (500%)
    • 
      10 times (1000%)
    • 
      20 times (2000%)
    • 
      50 times (5000%)
11. Which institution(s) effectively control the affordability of housing in Australia?
    • 
      the Real Estate Institute
    • 
      banks
    • 
      property developers
    • 
      valuers
12. Is the number of renters of property in Australia increasing or decreasing?
    • 
      increasing
    • 
      decreasing
13. The Pay As You Go (PAYG) income tax (including Medicare Levy) on a salary of $60 000 is approximately $12 250.
    • 
      true
    • 
      false
14. Can I use my PAYG tax to build wealth?
    • 
      yes
    • 
      no
15. In choosing a location that is going to give capital growth, which factor is most important?
    • 
      proximity to transport
    • 
      proximity to schools
    • 
      percentage of investor-owners
    • 
      established capital benchmark
16. You are seeking a bank loan for an investment property. Rank the following criteria in order of priority.
    • 
      interest rate of loan
    • 
      interest-only loan
    • 
      full disclosure of bank valuation of investment property
    • 
      non-collateralisation of other property
17. What is the ‘established capital benchmark’ of an area?
    • 
      the median price of property in the area
    • 
      the highest price of property in the area
    • 
      the lowest price of property in the area
18. What was the average land size of urban houses in Australia’s capital cities in 1970?
    • 
      450 m²
    • 
      600 m²
    • 
      750 m²
    • 
      1000 m²
19. What was the average land size of urban houses in Australia’s capital cities in 2017?
    • 
      450 m²
    • 
      600 m²
    • 
      750 m²
    • 
      1000 m²
20. What was the percentage growth in the median price of a typical high-rise unit between 1999 and 2017?
    • 
      4%
    • 
      6%
    • 
      8%
    • 
      10%
21. What is the fastest growing employment sector in Australia?
    • 
      healthcare
    • 
      education
    • 
      manufacturing
    • 
      retail
    • 
      construction

Sorry, but I’m not going to give you the answers at this point! That’s what the book is for. Forget about this quiz altogether for the time being.

At the end of the book, you’ll get the chance to tackle the same questions again, with answers provided if, by that time, you need them …

CHAPTER 1
Why build wealth?

Do you want to be wealthy?

Silly question, right? Everybody wants to be wealthy. Well, as a matter of fact, when we polled thousands of Australians 98 per cent said they absolutely didn’t want to be wealthy but they did want to be comfort...

Table of contents

• Cover Page
• Title Page
• Copyright page
• Acknowledgements
• Preface
• Foreword
• Introduction: A fool and his money are easily parted
• Who is John L. Fitzgerald?
• Part I: Starting points
• Part II: The 7 steps to wealth